Swiss banks call for tax amnesties

30th March 2009, 0 comments

The Swiss Bankers Association welcomes a new US tax amnesty.

GENEVA - The Swiss Bankers Association on Friday welcomed a partial tax amnesty offered in the United States, saying that it was a "fantastic moment" for countries to get their citizens to declare hidden assets.

"If I were the G20 finance ministers... I would really now put a tax amnesty in my country," Pierre Mirabaud, who is chairman of the Swiss Bankers Association and senior partner at private bank Mirabaud, said.

Several countries, including Switzerland, Luxembourg and Liechtenstein, in recent weeks reacted to international pressure over their secretive banking regimes by pledging to offer international cooperation against tax cheats.

Mirabaud said that, as a result of these moves, "it is a fantastic moment to induce people who are not in order with their own country to... find a way to settle what they need to settle in tax obligations."

Welcoming a partial amnesty offered in the United States, Mirabaud stressed that to be effective it would need to be "simple, should be easy to operate and should have a fixed rate acceptable to the population."

The US Internal Revenue Service on Thursday offered "penalty relief" to taxpayers who voluntarily reported their offshore activities and assets within the next six months, according to the law firm Caplin and Drysdale.

Switzerland's biggest bank UBS is fighting the American tax authorities' attempt to have it disclose details of 52,000 accounts held by Americans.

Liechtenstein's head of state Prince Alois earlier in March also suggested other countries should implement an amnesty under which people holding funds in the country's banks could return money to their home states.

Addressing the proposed amnesty, the prince said, "Otherwise, you risk driving the clients to other parts of the world and you don't necessarily get them back into your tax system."

Mirabaud rejected suggestions that changes to Swiss rules on international cooperation would impact Swiss banks, stressing that he was "confident" that assets would remain here.

"The Swiss Bankers Association has always repeated that no business model of banks should be based on tax evasion money."

"So we are definitely confident, I don't see any reason why we should have a major outflow of money out of Switzerland if we look in net basis (terms) in what comes in and what goes out, I don't see any reason to worry for the coming future."

Meanwhile, Mirabaud said his association did not recommend that Swiss private bankers remain within Switzerland to avoid arrest by foreign authorities over tax matters.

"Each bank is free to apply its policy. It is not an official policy, it is not a policy of the Swiss Bankers Association," he said, responding to queries about a report on the issue in the Financial Times.

But he added, "I have no fear about travelling because I would like to say that 99.9 percent of Swiss bankers who travel do it legally and do not have any illegal activities when they travel. So let's not draw conclusions that are completely wrong."